- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the Quarterly Fiscal Period Ended July 4, 1999 or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ___________ to ___________.
Commission File No. 015767
----------------------------------------------------
THE SPORTSMAN'S GUIDE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MINNESOTA 41-1293081
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
OF INCORPORATION OR ORGANIZATION)
411 FARWELL AVE., SO. ST. PAUL, MINNESOTA 55075
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(651) 451-3030
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
----------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No
--- ---
As of August 16, 1999 there were 4,747,810 shares of the registrant's Common
Stock outstanding.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE SPORTSMAN'S GUIDE, INC.
BALANCE SHEETS
(UNAUDITED)
(In thousands of dollars)
ASSETS July 4, January 3,
1999 1999
------- ----------
CURRENT ASSETS
Cash and cash equivalents $ -- $ 2,303
Accounts receivable - net 3,520 3,931
Inventory 37,441 27,855
Promotional material 4,327 3,968
Prepaid expenses 1,024 857
------- -------
Total current assets 46,312 38,914
PROPERTY AND EQUIPMENT - NET 5,474 4,798
OTHER ASSETS 191 191
------- -------
Total assets $51,977 $43,903
------- -------
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Checks written in excess of bank balances $ 2,493 $ --
Notes payable - bank 13,305 5,775
Current maturities of long-term debt 30 30
Accounts payable
Trade 13,993 15,726
Related parties 247 294
Accrued expenses 1,517 1,556
Customer deposits and other liabilities 2,382 3,042
------- -------
Total current liabilities 33,967 26,423
LONG-TERM LIABILITIES
Long-term debt 40 78
Deferred income taxes 407 407
------- -------
Total liabilities 34,414 26,908
COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY
Common Stock-$.01 par value; 36,800,000 shares authorized:
4,747,810 and 4,746,560 shares issued and outstanding at
July 4, 1999 and January 3, 1999 47 47
Additional paid-in capital 11,562 11,555
Retained earnings 5,954 5,393
------- -------
Total shareholders' equity 17,563 16,995
------- -------
Total liabilities and shareholders' equity $51,977 $43,903
------- -------
------- -------
See accompanying condensed notes to financial statements.
2
THE SPORTSMAN'S GUIDE, INC.
STATEMENTS OF EARNINGS
(UNAUDITED)
For the Thirteen and Twenty-six Weeks Ended
July 4, 1999 and June 28, 1998
(In thousands, except per share data)
Thirteen Weeks Twenty-six Weeks
--------------------- ----------------------
1999 1998 1999 1998
------- ------- ------- -------
Sales $32,683 $28,273 $71,067 $59,970
Cost of sales 19,230 15,836 42,300 34,241
------- ------- ------- -------
Gross profit 13,453 12,437 28,767 25,729
Selling, general and administrative
expenses 13,062 12,114 27,611 24,238
------- ------- ------- -------
Earnings from operations 391 323 1,156 1,491
Interest expense (198) (213) (314) (381)
Miscellaneous income, net 11 11 15 12
------- ------- ------- -------
Earnings before income taxes 204 121 857 1,122
Income taxes 71 42 296 387
------- ------- ------- -------
Net earnings $ 133 $ 79 $ 561 $ 735
------- ------- ------- -------
Net earnings per share:
Basic $ .03 $ .02 $ .12 $ .18
------- ------- ------- -------
Diluted $ .03 $ .02 $ .12 $ .17
------- ------- ------- -------
Weighted average common and common
equivalent shares outstanding:
Basic 4,748 4,726 4,748 4,122
------- ------- ------- -------
Diluted 4,831 4,848 4,840 4,438
------- ------- ------- -------
See accompanying condensed notes to financial statements.
3
THE SPORTSMAN'S GUIDE, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Twenty-six Weeks Ended
July 4, 1999 and June 28, 1998
(In thousands of dollars)
Twenty-six Weeks
---------------------
1999 1998
------- --------
Cash flows from operating activities:
Net earnings $ 561 $ 735
Adjustments to reconcile net earnings to net cash used
in operating activities:
Depreciation and amortization 855 734
Other (13) 48
Changes in assets and liabilities:
Accounts receivable 411 1,393
Inventory (9,586) (8,921)
Promotional material (359) (13)
Prepaid expenses (167) 243
Checks written in excess of bank balances 2,493 (1,117)
Accounts payable (1,780) (5,316)
Accrued expenses (39) (1,341)
Customer deposits and other liabilities (660) (1,225)
------- --------
Cash flows used in operating activities (8,284) (14,780)
Cash flows from investing activities:
Purchases of property and equipment (1,531) (859)
Other -- (191)
------- --------
Cash flows used in investing activities (1,531) (1,050)
Cash flows from financing activities:
Net proceeds from revolving credit line 7,530 10,147
Payments on long-term debt (25) (3,447)
Proceeds from exercise of stock options and warrants 7 1,658
Purchase of preferred stock -- (1,000)
Net proceeds from sale of common stock -- 8,472
------- --------
Cash flows provided by financing activities 7,512 15,830
------- --------
Decrease in cash and cash equivalents (2,303) --
Cash and cash equivalents at beginning of the period 2,303 --
------- --------
Cash and cash equivalents at end of the period $ -- $ --
------- --------
------- --------
Supplemental disclosure of cash flow information
Cash paid during the periods for:
Interest $ 307 $ 363
Income taxes $ 161 $ 1,194
See accompanying condensed notes to financial statements.
4
THE SPORTSMAN'S GUIDE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1: Basis of Presentation
The accompanying financial statements are unaudited and reflect all
adjustments which are normal and recurring in nature, and which, in the
opinion of management, are necessary for a fair presentation thereof.
Reclassifications have been made to prior year financial information wherever
necessary to conform to the current year presentation. Results of operations
for the interim periods are not necessarily indicative of full-year results.
Note 2: Net Earnings Per Share
The Company's basic net earnings per share amounts have been computed by
dividing net earnings by the weighted average number of outstanding common
shares. The Company's diluted net earnings per share amounts have been
computed by dividing net earnings by the weighted average number of
outstanding common shares and common share equivalents relating to stock
options and warrants, when dilutive.
For the thirteen week periods ended July 4, 1999 and June 28, 1998,
82,990 and 122,405 shares of common stock equivalents were included in the
computation of diluted net earnings per share. For the twenty-six week
periods ended July 4, 1999 and June 28, 1998, 92,220 and 315,580 shares of
common stock equivalents were included in the computation of diluted net
earnings per share.
Options and warrants to purchase 487,925 and 293,025 shares of common
stock with a weighted average exercise price of $6.87 and $7.28 were
outstanding during the thirteen week periods ended July 4, 1999 and June 28,
1998, but were not included in the computation of diluted earnings per share
because to do so would have been anti-dilutive.
Options and warrants to purchase 440,075 and 204,400 shares of common
stock with a weighted average exercise price of $6.98 and $7.62 were
outstanding during the twenty-six week periods ended July 4, 1999 and June
28, 1998, but were not included in the computation of diluted earnings per
share because to do so would have been anti-dilutive.
Note 3: Commitments
As of July 4, 1999, the Company had $4,918,000 of outstanding
documentary letters of credit, as compared to $1,094,000 as of January 3,
1999. The Company uses documentary letters of credit to finance the import of
merchandise for resale.
Note 4: Revolving Credit Facility
The Company recently amended its credit facility to provide a revolving
line of credit up to $25.0 million, subject to an adequate borrowing base,
expiring July 31, 2000. The borrowing base related to inventory is limited to
$22.0 million from May through November and $17.0 million from December
through April of each year. The revolving line of credit is for working
capital and letters of credit. Letters of credit may not exceed $15.0 million
at any one time. Borrowings under the revolving credit agreement bear
interest at the bank's base (prime) rate less 0.65%, or at the Company's
option, fixed over short term periods not to exceed six months at LIBOR plus
2.15 percentage points. The availability of funding under the credit facility
is subject to an annual pay-down provision whereby the principal balance,
excluding letters of credit, must be paid down to $7.5 million, plus 80% of
installment receivables. The pay-down requirement must be maintained for not
less than 30 consecutive days between December 1 and March 1 of each fiscal
year. The revolving line of credit is collateralized by substantially all of
the assets of the Company.
5
THE SPORTSMAN'S GUIDE, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(UNAUDITED)
All borrowings are subject to various covenants. The most restrictive
covenants require a maximum debt to net worth ratio, quarterly measure of
minimum tangible net worth and minimum net income over the most recent four
quarters, a maximum annual spending level for capital assets and prohibit the
payment of dividends to shareholders. As of July 4, 1999, the Company was in
compliance with all applicable covenants under the revolving line of credit
agreement. As of July 4, 1999, the Company had borrowed $13.3 million against
the revolving credit line compared to $5.8 million at January 3, 1999.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THIRTEEN AND TWENTY-SIX WEEKS ENDED JULY 4, 1999, COMPARED TO THIRTEEN AND
TWENTY-SIX WEEKS ENDED JUNE 28, 1998
SALES. Sales for the thirteen and twenty-six weeks ended July 4, 1999,
of $32.7 million and $71.1 million were $4.4 million or 15.5% and $11.1
million or 18.5% higher than sales of $28.3 million and $60 million during
the same periods last year. The increase in sales for the second quarter was
due to increases in average order size, overall customer response rates and
Internet sales, partially offset by a 4% reduction in catalog circulation,
versus last year. Customer response rates increased over the prior year
primarily from a planned reduction in new customer acquisition efforts during
the most recent second quarter. Internet sales for the second quarter were
approximately 7% of total sales, compared to less than 1% during the same
period last year. The Company defines Internet sales as those that are
derived from our web site and catalog orders that are processed online on our
web site. The increase in sales for the twenty-six weeks ended July 4, 1999,
was due to increases in average order size, Internet sales, response rates
and a 4% increase in catalog circulation. Internet sales for the first half
of 1999 were approximately 5% compared to sales of less than 1% last year.
The Company mailed 12 catalog editions, including nine specialty editions,
during the thirteen weeks ended July 4, 1999, compared to nine editions,
including seven specialty editions during the same period last year. Year to
date the Company has mailed 24 catalog editions, including 18 specialty
editions, compared to 19 editions, including 14 specialty editions, during
the same period last year.
Gross returns and allowances for the thirteen and twenty-six weeks ended
July 4, 1999, were $3.1 million or 8.7% of gross sales and $7.5 million or
9.5% of gross sales compared to $3.1 million or 10.0% of gross sales and $7.1
million or 10.6% of gross sales during the same periods last year. Gross
returns and allowances as a percentage of gross sales decreased during the
second quarter of 1999, compared to the same period last year, due to actual
returns on 1998 catalogs being lower than previously estimated and a shifting
sales mix that includes more hardlines product.
GROSS PROFIT. Gross profit for the thirteen and twenty-six weeks ended
July 4, 1999, was $13.5 million or 41.2% of sales and $28.8 million or 40.5%
of sales compared to $12.4 million or 44.0% of sales and $25.7 million or
42.9% of sales during the same periods last year. The decrease in gross
profit percentage for the second quarter was due primarily to lower shipping
and handling margins, compared to the same period last year. Shipping and
handling margins were down due to rate increases in parcel post, higher than
normal backorder levels and an increase in the average weight of outbound
shipments. The decrease in gross profit for the first half of 1999 is due
primarily to lower shipping and handling margins, including increased
distribution costs, and cold weather clearance promotions offered during the
first quarter, as compared to the first half of last year. Rate increases
from the United States Post Office as well as other parcel post carriers were
effective during the first quarter of 1999.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the thirteen and twenty-six weeks ended July 4,
1999, were $13.1 million or 40.0% of sales and $27.6 million or 38.9% of
sales compared to $12.1 million or 42.8% of sales and $24.2 million or 40.4%
of sales for the same periods last year. Selling, general and administrative
expenses as a percentage of sales are lower during both periods as compared
to last year due primarily to lower advertising expense as a percent of
sales. Advertising expense for the thirteen and twenty-six week periods ended
July 4, 1999, was $7.8 million or 23.9% of sales and $16.5 million or 23.2%
of sales compared to $7.6 million or 26.9% of sales and $14.8 million or
24.7% of sales for the same periods last year. During the second quarter
advertising expense as a percentage of sales was approximately 11% lower than
last year, primarily due to gains in average order size, overall increase in
customer response rates, Internet sales and lower catalog circulation
partially offset by increased mailing costs. Customer response rates during
the second quarter increased over the prior year primarily due to a planned
reduction in new customer acquisition efforts during the second quarter. Year
to date, advertising expense as a percentage of sales was approximately six
percent lower than last year largely due to gains in average order size,
Internet
7
sales, and response rates partially offset by increased mailing costs. Total
catalog circulation during the second quarter and first half of 1999, was
16.9 million and 35.4 million catalogs compared to 17.7 million and 34.1
million catalogs during the same periods last year. Mailing costs per
thousand were up during both periods due to the number of catalog editions.
EARNINGS FROM OPERATIONS. Earnings from operations for the thirteen and
twenty-six weeks ended July 4, 1999, were $391,000 or 1.2% of sales and $1.2
million or 1.6% of sales compared to $323,000 or 1.1% of sales and $1.5
million or 2.5% of sales for the same periods last year.
INTEREST EXPENSE. Interest expense for the thirteen and twenty-six
weeks ended July 4, 1999, was $198,000 and $314,000 compared to $213,000 and
$381,000 for the same periods last year. The decrease in interest expense
year to date was primarily due to the availability of additional working
capital from the public offering and retirement of subordinated notes
payable, both completed in February 1998.
NET EARNINGS. Net earnings for the thirteen and twenty-six weeks ended
July 4, 1999, were $133,000 or 0.4% of sales and $561,000 or 0.8% of sales
compared to $79,000 or 0.3% of sales and $735,000 or 1.2% of sales for the
same periods last year.
QUARTERLY FLUCTUATIONS AND SEASONALITY
The Company's sales and results of operations have fluctuated and can be
expected to continue to fluctuate on a quarterly basis as a result of a
number of factors, including: the timing of new merchandise and catalog
offerings; recognition of costs or sales contributed by new merchandise and
catalog offerings; fluctuations in response rates; fluctuations in postage,
paper and printing costs and in merchandise returns; adverse weather
conditions that affect response, distribution or shipping; shifts in the
timing of holidays; and changes in the Company's product mix. The Company
recognizes the cost of catalog production and mailing over the estimated
useful lives of the catalogs, ranging from four to six months from the
catalog's in-home date. Consequently, quarter-to-quarter sales and expense
comparisons will be impacted by the timing of the mailing of the Company's
catalog editions.
The majority of the Company's sales historically occur during the third
and fourth fiscal quarters. The seasonal nature of the Company's business is
due to the catalog's focus on hunting merchandise and related accessories for
the fall, as well as winter apparel and gifts for the holiday season. The
Company expects this seasonality will continue in the future. In anticipation
of increased sales activity during the third and fourth fiscal quarters, the
Company incurs significant additional expenses for hiring employees and
building inventory levels.
The following table sets forth certain unaudited quarterly financial
information for the Company for the periods shown. In the opinion of
management, this unaudited information has been prepared on the same basis as
the audited information and includes all normal recurring adjustments
necessary to present fairly, in all material respects, the information set
forth therein.
First Second Third Fourth
Quarter Quarter Quarter Quarter
FISCAL 1999
Sales $38,384 $32,683
Gross profit 15,314 13,453
Earnings from operations 765 391
Net earnings 428 133
FISCAL 1998
Sales $31,697 $28,273 $30,423 $52,483
Gross profit 13,292 12,437 12,464 20,797
Earnings from operations 1,168 323 609 975
Net earnings 656 79 212 469
8
LIQUIDITY AND CAPITAL RESOURCES
The Company meets its operating cash requirements through funds
generated from operations and borrowings under its revolving line of credit.
On February 10, 1998, the Company received net proceeds of $8.5 million from
the sale of 1.6 million shares of its common stock through a public offering.
The Company used a portion of the offering proceeds to pay $3.4 million of
subordinated notes payable and repurchase all of the Company's Series A
Preferred Stock for $1.0 million. The remaining $4.1 million was used for
working capital purposes.
The Company had working capital of $12.3 million as of July 4, 1999,
compared to $12.5 million as of January 3, 1999. The decrease of $200,000 was
primarily due to an increase in net property and equipment, offset by year to
date earnings. The Company's working capital requirements have increased over
the last three years primarily as a result of higher inventory levels which
are consistent with the Company's strategic plan to increase product margins
through purchasing more manufacturers' close-outs and imports. The Company
purchases large quantities of manufacturers' close-outs and other individual
product items on an opportunistic or when-available basis, particularly in
the case of footwear and apparel. The seasonal nature of the merchandise or
the time of acquisition may require that it be held for several months before
being offered in a catalog. This can result in increased inventory levels
thereby increasing the Company's working capital requirements and related
carrying costs.
The Company offers its customers an installment credit plan with no
finance fees, known as the "G. O. Painless 4-Pay Plan". Each of the four
consecutive monthly installments is billed directly to customers' credit
cards. The Company had installment receivables of $2.4 million at July 4,
1999, compared to $3.2 million at January 3, 1999. The installment plan will
continue to require the allocation of working capital, which the Company
expects to fund from operations and availability under its revolving credit
facility.
The Company recently amended its credit facility to provide a revolving
line of credit up to $25.0 million, subject to an adequate borrowing base,
expiring July 31, 2000. The borrowing base related to inventory is limited to
$22.0 million from May through November and $17.0 million from December
through April of each year. The revolving line of credit is for working
capital and letters of credit. Letters of credit may not exceed $15.0 million
at any one time. Borrowings under the revolving credit agreement bear
interest at the bank's base (prime) rate less 0.65%, or at the Company's
option, fixed over short term periods not to exceed six months at LIBOR plus
2.15 percentage points. The availability of funding under the credit facility
is subject to an annual pay-down provision whereby the principal balance,
excluding letters of credit, must be paid down to $7.5 million, plus 80% of
installment receivables. The pay-down requirement must be maintained for not
less than 30 consecutive days between December 1and March 1 of each fiscal
year. The revolving line of credit is collateralized by substantially all of
the assets of the Company.
All borrowings are subject to various covenants. The most restrictive
covenants require a maximum debt to net worth ratio, quarterly measure of
minimum tangible net worth and minimum net income over the most recent four
quarters, a maximum annual spending level for capital assets and prohibit the
payment of dividends to shareholders. As of July 4, 1999, the Company was in
compliance with all applicable covenants under the revolving line of credit
agreement. As of July 4, 1999, the Company had borrowed $13.3 million against
the revolving credit line compared to $5.8 million at January 3, 1999.
Cash flows used in operating activities for the twenty-six weeks ended
July 4, 1999, were $8.3 million compared to $14.8 million for the same period
last year. The decrease in cash flows used in operating activities was
primarily the result of an increase in accounts payable, as compared to June
28, 1998. During the first half of 1998, proceeds from the February 1998
stock offering were utilized to reduce accounts payable.
Cash flows used in investing activities during the twenty-six weeks
ended July 4, 1999, were $1,531,000 compared to $1,050,000 during the same
period last year. The Company plans to expend
9
approximately $1.9 million for capital additions during 1999.
Cash flows provided by financing activities during the twenty-six weeks
ended July 4, 1999, were $7.5 million compared to $15.8 million during the
same period last year. The change in cash flows provided by financing
activities during the first half of 1999 versus last year, was due to a
public stock offering, completed in February 1998, under which the Company
received net proceeds of $8.5 million. A portion of the proceeds were used to
pay $3.4 million of subordinated notes payable and to repurchase all of the
Company's Series A Preferred Stock for $1.0 million. The Company also
received proceeds from the exercise of stock warrants and options totaling
$1.7 million.
The Company believes that cash flow from operations and borrowing
capacity under its revolving credit facility will be sufficient to fund
operations and future growth for the next 12 months.
YEAR 2000
The statements in this section include "Year 2000 readiness disclosure"
within the meaning of the Year 2000 Information and Readiness Disclosure Act.
The Year 2000 issue is the result of computer programs accessing date
information stored in a two-digit year format (99) as opposed to a four-digit
year format (1999). Computer systems with this date representation and access
method will be unable to accurately interpret dates beyond the year 1999.
This inability could cause problems ranging from reporting errors to full
system failures. The Company utilizes a relational database that stores dates
in an internal format, which is sequentially numbered, either negative or
positive, in relation to January 1, 1968. For example, November 5, 1998, is
day 11267. Each time a date is utilized it is converted from the internal
format to an external date format, thereby avoiding the use of a two-digit
date representation. Therefore, management expects the impact of the Year
2000 on the Company's internal computer systems to be minimal.
The Company has initiated a comprehensive project to prepare and test
its computer systems, including all telecommunications and data
communications systems, to ensure that they will be able to accurately
process date information beyond the year 1999. The investigative and
assessment phases of this project are completed. Initial program
modifications and testing were completed in May 1998. Comprehensive system
testing of this project began in the second quarter of 1999 with the
completion scheduled by the middle to end of the third quarter of 1999.
Costs associated with this Year 2000 compliance project are funded
through cash flows from operations. Costs related to this project are
estimated to be approximately $400,000.
Time and cost estimates are based on currently available information and
are management's best estimates. However, there is no guarantee that these
estimates will be achieved, and actual results may differ materially from
those anticipated. Developments which could affect estimates include, but are
not limited to, the availability and cost of trained personnel; the ability
to locate and correct all relevant computer code and equipment; and planning
and modification success of third party suppliers of product and services.
The Company will continue to assess and evaluate cost estimates and target
dates for completion of each phase of the Year 2000 project on a periodic
basis.
The Company has contacted its critical suppliers of products and
services to assess whether these suppliers' operations and the products and
services they provide are Year 2000 compliant. The Company is continuing to
monitor the progress of those suppliers who are in the planning or execution
phase of their Year 2000 projects to ensure eventual compliance.
If the systems of the Company or other companies on whose services the
Company depends, including the Company's customers, or with whom the
Company's systems interface are not Year 2000 compliant, there could be a
material adverse effect on the Company's financial condition or results of
operations. At this time, the Company believes it is unnecessary to adopt a
contingency plan covering the possibility that the project will not be
completed in a timely manner, but as part of the overall project, the Company
will continue to assess the need for a contingency plan.
10
FORWARD-LOOKING STATEMENTS
This report may contain forward-looking statements within the meaning of
the federal securities laws. Actual results could differ materially from
those projected in the forward-looking statements due to a number of factors,
including general economic conditions, a changing market environment for the
Company's products and the market acceptance of the Company's catalogs as
well as the factors set forth under "Risk Factors" in the Company's
prospectus dated February 5, 1998, filed with the Securities and Exchange
Commission pursuant to Rule 424(b) under the Securities Act of 1933.
11
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of shareholders was held on May 10, 1999, at
which the following matters were submitted to a vote of shareholders:
1. Election of seven directors.
Nominee For Withheld
------------------ --------- --------
Gary Olen 3,206,092 310,365
Gregory R. Binkley 3,206,092 310,365
Charles B. Lingen 3,206,412 310,045
Vincent W. Shiel 3,206,312 310,145
Leonard M. Paletz 3,206,412 310,045
Mark F Kroger 3,202,812 313,645
William T. Sena 3,204,612 311,845
2. Approval of the 1999 Stock Option Plan.
FOR AGAINST ABSTAIN BROKER NON-VOTES
--------- ------- ------- ----------------
2,026,742 369,302 5,435 1,114,978
3. Ratification of the engagement of Grant Thornton LLP as independent
certified public accountants for the Company for fiscal 1999.
FOR AGAINST ABSTAIN BROKER NON-VOTES
--------- ------- ------- ----------------
3,501,635 4,575 10,247 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
10.1 Industrial Real Estate Lease between the Company and AMB Property, L.P. as
amended May 24, 1999.
10.2 Second Amendment to Credit Agreement between the Company, Norwest Bank
Minnesota, N.A. and M&I Marshall and Ilsley Bank dated July 8, 1999.
27 Financial Data Schedule
(b) Reports on Form 8-K
During the thirteen weeks ended July 4, 1999, the Company filed a report on
Form 8-K dated May 11, 1999, reporting under Item 5 "Other Events" the
adoption of a Shareholder Rights Plan.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE SPORTSMAN'S GUIDE, INC.
Date: August 16, 1999 /s/ Charles B. Lingen
---------------------------------
Charles B. Lingen
Senior Vice President Finance/CFO
13